In Brief
The Supreme Court was split 1-1 on whether coconut oil packed in small containers qualifies as "coconut oil" under Chapter 15, Heading 1513 (nil excise duty) or as "hair oil" under Chapter 33, Heading 3305 (16% duty). Justice Gogoi held coconut oil remains classifiable under Chapter 15 regardless of pack size, as the HSN-based tariff structure requires statutory provisions to prevail and Chapter Note 3 requires explicit labeling indicating hair use. Justice Banumathi (dissenting) held that after the 2005 amendment, the deletion of labeling requirements from Chapter Note 3 means small-pack coconut oil suitable for hair use is classifiable as hair oil under Chapter 33, a finding supported by market evidence and common parlance. The case was referred to the Chief Justice for directions on account of the judicial split."
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